Su Zhu, co-founder of the now-defunct crypto hedge fund Three Arrows Capital (3AC), is slated for release later this month after spending several months in custody, Bloomberg reported on Dec. 13.
In September, Zhu got a four-month jail sentence due to non-cooperation in the liquidation process of the collapsed firm. As per the Bloomberg report, Zhu’s release is attributed to demonstrating good behavior during the period of custody.
3AC liquidators question Zhu
This development coincides with Zhu’s recent appearance in a Singaporean court, where lawyers from Teneo, the appointed liquidator for 3AC, questioned him on the reasons behind the firm’s failure and the whereabouts of its assets.
Teneo wants to reclaim $1.3 billion from Zhu and his partner, Kyle Davies, who is also wanted by the Singaporean authorities. Notably, the court-appointed liquidators have previously accused the co-founders of the bankrupt firm of being uncooperative and providing “selective and piecemeal disclosures” about the bankrupt hedge fund assets.
Last year, 3AC was one of the several crypto firms, including FTX and Celsius, that collapsed following a significant market downturn.
The hedge fund had held a prominent position in the industry and had substantial investment stakes in projects such as LUNA, Aave, Avalanche, BlockFi, Deribit, and Solana. The firm managed around $18 billion of digital assets at its peak.
The company’s downfall resulted from inadequate risk management protocols and imprudent transactions driven by excessive greed.
Following the collapse, Singaporean authorities banned Zhu and Davies for nine years because they violated the country’s Securities and Futures Act 2001 (SFA) and Securities and Futures (Licensing and Conduct of Business) Regulations (SFR). Additionally, the regulator stated that 3AC had failed to inform it about the appointment of Cheong Jun Yoong Arthur as its portfolio manager and had misrepresented his employment status.
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